Deutsche Boerse Fights NYSE Bid Ban to Protect Future Deals

By Gaspard Sebag -
Jun 4, 2014

Deutsche Boerse AG (DB1) is fighting for
its right to make future acquisitions after the European Union
blocked its merger with NYSE Euronext, which would have created
the world’s biggest exchange, lawyers told an EU appeals court.

The European Commission’s 2012 decision to veto the deal
was “wrong”, Deutsche Boerse lawyers said at a hearing at the
EU’s General Court today in Luxembourg.

“We are fighting today the negative precedent set by the
European Commission,” Jurgen Beninca, a lawyer for Deutsche
Boerse, told the EU’s second-highest court.

The commission blocked the $9.5 billion deal in February
2012, rejecting the companies’ arguments that derivatives traded
over the counter competed with those traded on exchanges. The
merger would have led to a “near monopoly” in European
exchange-traded derivatives, according to the regulator.

The EU tribunal can cancel regulators’ decision or ask them
to re-examine the deal if it backs any of the Frankfurt-based
exchange’s claims. Appealing a merger decision is an attack on
the commission’s legal reasoning and doesn’t say anything about
whether companies intend to resurrect a deal.

While there are no plans to do so, it’s still “a
possibility” that Deutsche Boerse could buy NYSE Euronext,
Beninca said.

Carved Out

Despite that acquisition, NYSE Euronext’s legal entity
hasn’t changed and could be carved out, said Christian Zschocke,
another lawyer for Deutsche Boerse. “Conceptually the same deal
could happen again.”

The case lacks an underlying reason “because it is
accepted that the transaction can no longer go ahead,” said
Nicholas Khan, a lawyer for the commission.

Still, the EU reviews each deal on its own merits even if a
company seeks approval for a transaction that has already been
turned down, Khan said.

“There is no question of dusting down the old decision and
adopting it again.”